Published by Programme B
It’s been a tough few years for Canadians, and another rough one may be in the books. The CBC reports a gloomy outlook for the year ahead, in which a recession is looming, unemployment may rise, and inflation remains high.
That might sound bad enough, but to top it all off, most Canadians are facing the next 12 months without their usual financial safety nets.
Emergency Savings Are at an All-Time Low
According to a survey conducted by the Angus Reid Institute, a non-profit research organization, a little more than half (51%) of Canadians can’t manage an unexpected expense of $1,000.
The survey, which polled a randomized sample of 1,622 Canadian adults from across the country, found that a whopping 14% of people couldn’t handle any unexpected expense at all.
Many People Have Maxed Out Their Credit Cards
When your transmission goes unexpectedly, and you don’t have savings to handle the repairs, how would you pay for a mechanic? If you’re like most people, you would turn to the plastic in your wallet.
Unfortunately for a lot of people, this option is no longer on the table. A report from Equifax Canada shows that credit card balances rose last year to pre-pandemic levels. According to the credit bureau’s vice president, today’s credit card spending is reaching historically high levels.
What Are Your Options in an Emergency?
If you don’t have savings, building an emergency fund should be your priority. But sometimes, an emergency will crash-land into your budget before you can save anything worthwhile. What then?
Look into an Online Line of Credit
If you have no room on your credit card, a line of credit may be an alternative backup. A line of credit is a similar kind of revolving account that lets you borrow continuously up to a certain amount. As long as you pay off what you use and keep the account open, you can dip into this limit as often as you like.
You can apply for a personal line of credit online using nothing but your phone and personal information, making online lines of credit a convenient option in an emergency. They have easy, quick applications that take a matter of minutes to complete, so you’ll know if you qualify without delay.
Ask Your Employer for Help
If you can’t qualify for an affordable line of credit, you might be able to turn to your boss for help. They might be sympathetic to your situation and willing to give you an early payday if you’re on good terms.
You should also consider how the company is fairing before you ask. If the company has just laid off some staff, you might not get the answer you want. But you might be able to secure a cash advance if the company is thriving.
Learn How to Negotiate
Another emergency option involves talking to your creditors. Explain that your finances are tight at the moment and inquire about any financing plans they might have. These plans might delay your due date, adjust what you owe, or allow you to pay off your balance over time.
Many companies are willing to strike such a deal, especially if the alternative is that you don’t pay them. After all, it’s better to get paid a little than none at all.
Dealing with an unexpected expense with savings is hard, but it is possible. Remember these tricks if you encounter an emergency before you can build savings.
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